MEMORANDUM OPINION AND ORDER BACKGROUND loanDepot is a mortgage lender. Dkt. 179 2. loanDepot claims that CrossCountry Mortgage, LLC (CCM), its chief competitor, “improperly poached” 32 loanDepot employees, including Stuart Kolinsky.
2, 25. In July 2022, loanDepot sued CCM, Kolinsky, and various other former employees. Dkt. 1. loanDepot later filed an amended complaint. Dkt. 179. CCM brought counterclaims against loanDepot for abuse of process and for violations of the Lanham Act and related state laws. Dkt. 237. Kolinsky brought counterclaims against loanDepot for breach of contract and breach of the implied covenant of good faith and fair dealing. Dkt. 238. loanDepot moves to dismiss those counterclaims. For the reasons explained below, loanDepot’s motion is GRANTED in part and DENIED in part. LEGAL STANDARD “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks and citation omitted). In deciding a motion to dismiss, well-pleaded factual allegations are accepted as true, and all reasonable inferences are drawn in the non-movant’s favor. Cornelio v. Connecticut, 32 F.4th 160, 168 (2d Cir. 2022). While detailed factual allegations are not necessary, “a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). DISCUSSION I. CCM’s Counterclaims A. Abuse of Process First, loanDepot moves to dismiss CCM’s abuse of process counterclaim. To state a claim for abuse of process, a party must allege that the alleged tortfeasor “(1) employs regularly issued legal process to compel performance or forbearance of some act (2) with intent to do harm without excuse of justification, and (3) in order to obtain a collateral objective that is outside the legitimate ends of the process.” Hernandez v. United States, 939 F.3d 191, 204 (2d Cir. 2019) (quoting Savino v. City of New York, 331 F.3d 63, 76 (2d Cir. 2003)). According to CCM, loanDepot lied to obtain a TRO by falsely claiming that its customer data is a trade secret or confidential. Dkt. 237 53.1 CCM claims that this was done as part of a “malicious scheme to seek retribution” because CCM rejected loanDepot’s 2021 merger proposal. 73. And it claims that the TRO was meant to prevent CCM from “lawfully recruiting and hiring loanDepot’s loan officers,” and “to improperly chill loanDepot’s loan officer[s] from any desire to leave loanDepot and join CrossCountry.” 78. Even accepting as true CCM’s allegations that loanDepot obtained the TRO through false allegations and did so to harm CCM’s business, CCM’s abuse of process claim fails. “‘[T]he falsity of the allegations [used to obtain a court order] and defendant’s malicious motive in making them do not, of themselves, give rise to a cause of action for abuse of process’ where ‘the process was both issued and used for its intended purpose.’” Silver v. Kuehbeck, 217 F. App’x 18, 21 (2d Cir. 2007) (quoting Butler v. Ratner, 619 N.Y.S.2d 871, 873 (3d Dep’t 1994) (dismissing ex-wife’s abuse of process claim where false allegations of abuse and harassment were used to obtain protective order for the “ulterior and illegitimate” purpose of frustrating ex-husband’s lawful activities)). Here, the TRO was “employed for the very purpose of [its] filing,” i.e., to temporarily enjoin CCM’s use of customer information. Id. That the TRO had other effects, such as hindering CCM’s ability to lawfully recruit loanDepot’s employees or causing CCM to incur legal expenses, is not enough to sustain a claim for abuse of process. Those collateral effects are foreseeable when a TRO or other interim relief is granted by a court. And CCM has not alleged any improper use of the TRO. See Silver, 217 F. App’x at 21 (citing Hauser v. Bartow, 273 N.Y. 370, 374 (1937) (“If one resorts to legal process to have another declared incompetent, and uses it for that purpose, he does not commit the wrong, though he may be guilty of another wrong, no matter what his motives, hopes or expectations may be. But if he makes use of that process, not for the purpose of attaining its proper end, but to extort money, or to coerce action, that is a perversion of process.”)). Accordingly, the Court finds that CCM’s abuse of process claim fails. loanDepot identified this deficiency in CCM’s pleadings as early as January 2023. See Dkt. 215 at 1 (“[A]lleging retribution…is insufficient to state a claim.”). And CCM was already given an opportunity to withdraw or replead this counterclaim. See Dkt. 225. Given CCM’s failure to cure, the abuse of process claim is dismissed with prejudice. See MSP Recovery Claims, Series LLC v. Hereford Ins. Co., 66 F.4th 77, 90 (2d Cir. 2023). B. Lanham Act and State Law Claims CCM also brings claims for false association and false advertisement under the Lanham Act, unfair competition under New York common law, and unfair business practices under the New York Deceptive Practices Act. These claims are all based on allegations that loanDepot sent blast marketing emails advertising loanDepot’s services from the loanDepot email addresses of former employees after those employees had begun working for CCM. Dkt. 237
